Jill Borts Believes That the Price Elasticity of Demand for Her

question 93

Multiple Choice

Jill Borts believes that the price elasticity of demand for her economics textbook is relatively inelastic.She argues 'I was told I had to purchase a book written by Hubbard and O'Brien that is required by my instructor.If I wanted to buy a mystery novel I would have many authors to choose from.Therefore,the demand for mystery novels is more elastic than the demand for my textbook.' Is Jill correct?

• A) The demand for the textbook is more inelastic, but Jill's reasoning is incorrect. The reason the textbook has an inelastic demand is that it is more expensive than any novel.
• B) She is correct.
• C) She is confused. She should have concluded that the textbook has a more elastic demand than a novel.
• D) She is correct that the textbook has a more inelastic demand, but that is because most students pay for their textbooks with credit or debit cards. Most people pay for novels and other books with cash or by cheque.

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Definitions:

Neuron

A specific type of cell responsible for sending nerve signals; also known as a neuron.

All-Or-None Response

A neuron’s reaction of either firing (with a full-strength response) or not firing.

Neural Impulses

Electrical signals that travel along neurons, transmitting messages throughout the nervous system.

Sympathetic System

Part of the autonomic nervous system that prepares the body for 'fight or flight' responses, increasing heart rate, dilating airways, and mobilizing energy.